Caryn Capriccioso and Rick Zwetsch founded their Longmont-based business, interSector Partners L3C, with the idea of helping businesses connect with nonprofits that match their mission and helping nonprofits think more like businesses.

Five years later the pair still serve clients through interSector Partners, both in Colorado and nationwide.

But a natural offshoot of that model has become the pair's latest venture, the Colorado Nonprofit Social Enterprise Exchange, which they launched in partnership with Julie Voyles of JVoyles Nonprofit Consulting Inc.

The Exchange, as they're calling it, just "graduated" its first class of eight nonprofits who either operate or will soon be operating what are known in the nonprofit world as social enterprises.

"Where (interSector) had been seeing a lot of work recently is with nonprofit organizations that want to start for-profit entities — which are called social enterprises," said Zwetsch.

"We realized we could work with organizations one on one and keep doing what we were doing," added Capriccioso, "but we (also) realized we could move the needle on social enterprise by helping more organizations at once."

Nonprofits are typically funded through grants, donations or through charging a fee for services, Capriccioso said. Another revenue stream — as an example — would be the Longmont Humane Society's Thrift Store, which is that organization's social enterprise.

Many nonprofits have no idea how to launch such a business, she said, but getting them to think about it can often be an eye-opener for them.

"They're looking at it for a couple reasons," said Capriccioso. "One is that (new income stream), but the other reason is to create employment opportunities for the people they serve."

Voyles brought up another example: Say you have a nonprofit that works with people who have served time in prison. One way it could help its clients is to offer them counseling services on looking for work, interviewing skills, etc. But the social enterprise model would have them working in the business started by the nonprofit. Not only does this provide them with money and self-esteem, but once employed they start putting money back into their local communities.

The first Exchange class of eight nonprofits was a diverse one, with businesses to match:

• The Plains Conversation Center plans to launch a "zero-impact Grassland EcoResort" designed to connect people with the beauty and importance of the high plains of Colorado.

• The Gathering Place plans to offer high-end reproductions of artwork created by women who are homeless. The art will be turned into corporate greeting cards that can be purchased by businesses wanting to demonstrate their community responsibility.

• Youth on Record, a nonprofit formerly known as flobots.org, which advertises itself as "empowerment through creative education," plans to offer a children's party business where kids and their friends can learn the ins and outs of recording from area musicians. Disadvantaged youth will be hired to work at the business.

The other nonprofits were Children's Hospital Denver, Colorado Youth for a Change, Girls Inc. of Metro Denver, the Denver Children's Advocacy Center and Care and Share Food Bank of Southern Colorado.

Foundations and corporate sponsors play key roles

While Zwetsch brings a background in working with for-profit companies and Capriccioso with nonprofits, Voyles brings deep contacts within the world of foundations, which were critical to getting the Exchange launched, Zwetsch said.

"She's a philanthropic services consultant and she was really dialed into the fact that foundations were very interested in this but they just didn't know where to go," he said.

The cost per nonprofit for the first Exchange class was $24,000. Of that, the nonprofits paid $3,000 and the rest came from foundations and other sponsors.

The Longmont Community Foundation is an Exchange sponsor, and the Third Generation of the Hunt Alternatives Fund, the Rose Community Foundation and the Denver Foundation are three of its largest benefactors.

"Foundations are really committed to nonprofits having multiple sources of revenue," Voyles said. "I think the motivating factor (for backing the Exchange) is they want the nonprofits to be stronger, to be more effective, to increase their capacity."

Through participating in the Exchange and creating social enterprises, Voyles said, the nonprofits can serve more people and serve them in a better way.

"Our long-term goal is to reduce the amount of foundation revenue supporting the program," Capriccioso said.

Added Zwetsch, "We're starting to get more interest from banks, from attorneys, from accounting firms, that have nonprofit clients."

Plans are already in the works for a second class to go through the Exchange program, Zwetsch said.

Like the first, it will start with the three partners holding introductory workshops.

All-day classes are held once a month, with each nonprofit bringing anywhere between three and five people to each class.

Creating a Colorado 'ecosystem'

Voyles said one of the exciting things about the Exchange for her is it's creating an "ecosystem" within the nonprofit world where people from diverse organizations can learn best practices from each other and mentor each other. The first class of eight produced a lot of people well-versed in social enterprises, she said, and outside of that group there were connections made with guest speakers and audience members who attended the sessions.

Voyles said back in 2011, as part of her work with the Hunt Alternatives Fund, she visited with many nonprofits and would ask them if they had ever considered launching a social enterprise?

"Across the board almost every single one of them said 'yes,'" Voyles said. "And when I asked them, 'How would you go about doing that?' Almost all of them said, 'I have no idea.'"

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